Wednesday, March 19, 2014

Two weeks before she was
planning to close on the purchase of a new home in Indiana,
appellant Yulia Abair learned that her bank in Russia would
not wire the purchase price from her account. She managed to
secure the money before the closing by withdrawing a few
hundred dollars at a time from ATMs up to her maximum
daily limit and depositing the cash at her bank in Indiana. She
was charged with violating a federal criminal statute that prohibits structuring currency transactions in order to evade
federal reporting requirements for transactions involving more
than $10,000 in currency. 31 U.S.C. § 5324(a)(3). Abair was
convicted in a jury trial. She also agreed to sell her new home
and to forfeit the entire proceeds to the government. She
argues on appeal that the trial court erroneously applied
Federal Rule of Evidence 608(b) by allowing the prosecutor to
cross-examine her at length about alleged false statements on
a tax return and student financial aid applications. We find that
the government lacked a good faith basis for believing that
Abair lied on the tax and financial aid forms and therefore
conclude that the district court erred by allowing the prosecutor
to ask a series of accusatory and prejudicial questions about
them under Rule 608(b). We cannot say that the error was
harmless in a trial that hinged on Abair’s credibility. We
reverse Abair’s conviction and remand for a new trial. Abair
also challenges the forfeiture of the entire proceeds of her
home sale as an unconstitutionally excessive fine. We offer
some guidance on that issue in case it arises again after
remand.

[The forfeiture discussion, which begins on p. 14, concludes] We recognize that the government believes that Abair may
have been involved in a range of other wrongdoing, but there
is simply no evidence of other wrongdoing. For all that
appears in this record, Abair is at most a one-time offender
who committed an unusually minor violation of the structuring
statute not tied to other wrongdoing. We therefore have
serious doubts that the forfeiture of her home’s entire $67,000
value comports with the “principle of proportionality” that is
the “touchstone of the constitutional inquiry under the
Excessive Fines Clause,” Bajakajian, 524 U.S. at 334, but further
exploration of the issue can await a new trial.

Abair’s conviction and sentence, including the forfeiture
order, are REVERSED and the case is REMANDED to the
district court for a new trial.

[Judge Sykes' dissent begins on p. 17] Yulia Abair, a Russian
immigrant and registered nurse, made an unusual series of
large cash deposits into her account at a bank near South Bend,
Indiana. This attracted the attention of IRS agents and eventually
the Department of Justice, but their investigation turned
up no evidence of nefarious activity. Abair wasn’t evading
taxes or laundering ill-gotten gains; she was buying a home
and was having difficulty accessing funds in her Citibank
Moscow account. To get around the problem, Abair resorted
to the scheme my colleagues have described: She made
repeated ATM withdrawals from her Russian bank account
and deposited the cash with her local bank in a series of
transactions just under the $10,000 threshold that triggers the
bank’s reporting requirements for currency transactions. The
withdrawals were legitimate, but the deposits landed Abair in
big trouble.

The bank tellers told investigators that the money had a
“musty,” “mildewy,” or “dirty” odor, as if it had been kept in
a basement rather than freshly drawn from an ATM. Prosecutors
inferred from the odd smell that the money must have
come from an illegitimate source and brought the full force of
the federal criminal law down on Abair. * * *

Finding no error, I
would affirm, although not without serious misgivings about
the wisdom of this prosecution. It’s unclear to me how the
interests of justice are served by saddling Abair with a felony
conviction and forcing her to forfeit her home as punishment
for a technical, trivial violation of the structuring statute.
Without more, the government’s suspicions about the malodorous
money do not support an inference that broader
criminality was at work here. Abair has no criminal history,
and at sentencing the judge noted that she is otherwise a
responsible person, has a good employment history, is an
excellent mother to her 11-year-old son, and has substantial
community support. No doubt these observations contributed
to the judge’s decision to place her on probation.